EXHIBIT 10.1
RELEASE AND SETTLEMENT AGREEMENT
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This Release and Settlement Agreement (the "Agreement") is
hereby entered into as of the __th day of _________, 2006 by and
between the
following parties:
A. CompuDyne Corporation, including any of its predecessors,
successors, subsidiaries and present and former officers,
directors, employees,
assigns, and persons acting on their behalf (collectively,
"CompuDyne");
B. William Blair Mezzanine Capital Fund II, L.P. including any
of its predecessors, successors, subsidiaries and present and
former officers,
directors, employees, assigns, and persons acting on their behalf
(collectively,
"Blair"); and
C. Friedman, Billings, Ramsey Group, Inc., including any of its
predecessors, successors, subsidiaries and present and former
officers,
directors, employees, assigns, and persons acting on their behalf
(collectively,
"FBR") (CompuDyne, Blair and FBR are collectively referred to
herein as the
"Parties").
WHEREAS, on September 12, 2001, CompuDyne and FBR entered into
an agreement, which was amended on September 27, 2001, whereby FBR
agreed to
act as financial advisor and lead underwriter in connection with
the private
placement of two million four hundred fifty thousand (2,450,000)
shares of
CompuDyne common stock (the "Offering");
WHEREAS, CompuDyne and FBR have expressed a desire to engage
in future business dealings and recognize that resolving the issues
covered by
this Agreement will foster the ability to engage in future business
dealings;
WHEREAS, the Parties do not admit that liability or wrongdoing
of any kind occurred in connection with the Offering.
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WHEREAS, the Parties mutually desire to enter into a full and
final settlement of all claims that the Parties have or may have
against one
another, from the beginning of time to the date of this Agreement,
including
without limitation any and all claims arising out of or relating to
the
Offering, or arising out of or relating to FBR's alleged trading in
shares of
CompuDyne common stock (CDCY);
NOW, THEREFORE, in consideration of mutual covenants contained
herein, it is agreed by and between the Parties as follows:
1. FBR shall make the following payments to CompuDyne, for the
benefit of CompuDyne and Blair:
a. FBR shall pay to CompuDyne any amounts directed to be
paid by FBR to CompuDyne and/or Blair pursuant to a settlement
between FBR and
the United States Securities and Exchange Commission (the "SEC") in
In the
Matter of Friedman, Billings, Ramsey & Co., Inc. (the "SEC
Settlement"); and
b. FBR shall pay to CompuDyne two million three hundred
thirty three thousand nine hundred fifty nine dollars ($2,333,959),
within two
business day's following the execution of this Agreement by all
Parties, by wire
transfer pursuant to wiring instructions to be provided by
CompuDyne.
2. In the event that the total amount paid by FBR to CompuDyne
and/or Blair pursuant to Paragraph 1 of this Agreement is less than
four million
five hundred thousand dollars ($4,500,000), FBR shall pay the
difference to
CompuDyne at such time as the SEC-directed funds are paid to
CompuDyne, by wire
transfer pursuant to wiring instructions to be provided by
CompuDyne.
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3. In the event that the total amount paid by FBR to CompuDyne
and/or Blair pursuant to Paragraph 1 of this Agreement exceeds four
million five
hundred thousand dollars ($4,500,000), CompuDyne and Blair agree to
deduct any
amount paid in excess of four million five hundred thousand dollars
($4,500,000)
from the amount paid to CompuDyne pursuant to Paragraph 1(b) of
this Agreement,
and CompuDyne and Blair further agree to return promptly such
excess amounts up
to two million three hundred thirty three thousand nine hundred
fifty nine
dollars ($2,333,959) to FBR. Except as provided in this paragraph,
neither
CompuDyne nor Blair shall have any obligation to pay any amounts to
FBR under
this Agreement.
4. In the event the SEC determines not to require FBR to make
any payment to CompuDyne and/or Blair in In the Matter of Friedman,
Billings,
Ramsey & Co., Inc., within two business days of receiving such
notice from the
SEC, FBR shall pay $2,166,041 to CompuDyne, by wire transfer
pursuant to wiring
instructions to be provided by CompuDyne.
5. The Parties hereby enter into the following releases:
a. CompuDyne and Blair, for themselves, their predecessors,
successors, insurers, attorneys and present and former agents,
servants,
principals, directors, owners, officers, employees and assigns,
hereby fully,
finally, and forever release and discharge FBR, from any and all
claims, rights,
debts, liabi
